Things Not To Do Before A Home Purchase
Home buying is a big purchase and you will need to make careful decisions before lashing out on this kind of money. There’re also a few things you should keep in mind before you buy a place you can call ‘home’.
Avoid other major purchases. Especially car unless you can pay cash for both the car and the house. Why? When determining your qualification for a mortgage, the lender looks at your ‘debt-to-income’ ratio. This ratio is the percentage of your gross monthly income (before tax) you spend on debt. The more debt you have, the less you can get on your mortgage if you’re even qualified.
Don’t move money around. Another thing the lender will be concerned about is the source of funds for your down payment and closing costs. You will be asked to provide statements for the last few months on any of your liquid assets including checking accounts, saving accounts, stock statements, mutual funds, etc. If you’ve been moving money around, there may be large deposits or withdrawals in some of them. Therefore, the mortgage underwriter will probably ask for a complete paper trail of all the deposits and withdrawals and it could get quite tedious. So leave your money where they are until you get your mortgage and don’t change banks either.
Check out our Las Vegas Buyer Agent page.
